Stocks Are About To Get Crazier!!!!

Added: 2026-05-28

[00:00:00]Welcome everybody to the daily recap show where we talk about stocks and the financial markets. My name is Chase. If you like this video, please subscribe, hit that notification bell as well as the like button, and leave a comment for the algorithm. Let's get into it. This is the daily heat map of the S&P 500 and US stocks were mixed on Wednesday as AI momentum faded and oil prices fell amid disputed reports of a draft memorandum between the US and Iran that said Tehran would reopen the Strait of Hormuz. And guys, mixed day today here today. You know, there were some winners, there were some gainers, and there were some losers. The biggest winners were actually, you know, I guess you could call it the broad market, but some of the Mag 7 did participate. For example, Apple was up 0.78% Google and Meta uh gained and that helped com services gain. Tesla and Amazon rally and I can help consumer discretionary rally. And then we also saw the healthcare stocks rally right here. Other than [music] that, apart from consumer defenses, which is a little bit concerning, and some of the bigger names in industrials, everything else was kind of mixed/red.

[00:01:04]See the big names in financials uh were red, infrastructure down here today along with tech semiconductors not holding up too well, but that's because these stocks rallied. I mean, MU was up 20% yesterday, up 2% today, take a bit of a breather. You know, same with AVGO, Intel, Texas Instruments, Qualcomm.

[00:01:20]These have all rallied significantly.

[00:01:22]It's good to see a bit of a breather and I would probably expect that for the rest of the week, but never count these stocks out right here. All in all, guys, it was just a mixed day of trade here today coming off yesterday's day, which was very, very bullish. The RTY was up 0.12% today, the S&P 500 virtually flat.

[00:01:39]And again, that's coming off a day where both indices were up in excess of 1% yesterday. Today's leaders were the XLY, that's the discretionary space along with staples. Right, very interesting to see these two at the top. XLC, XLB, XLI were up there as well. Three sectors gaining 1%. Now, the reason why you see the S&P 500 was flat, reason why the RTY was flat had to do with this right here.

[00:02:00]Technology was actually in the red today. IGV software was down 0.8% XLF financials was down 8.28% XLE energy was down 1.15% very interesting along with gold which is down 1.25% for the day. So all in all we had a mixed day, some winners some losers but it's good to see some of the broad market gaining a bit of traction here after it has been a one-way street here as pertains to technology. You can see the value component of the market was in the green everything else was red with large cap growth taking a little bit on the chin.

[00:02:32]Globally we again, you know, we saw Europe was very very mixed but North America in the red, South America in the red and then Asia again mixed as well with India South Korea, Malaysia, Indonesia these gaining some of the other parts of Southeast Asia falling.

[00:02:46]Australia and New Zealand green there as well. South African markets slightly in the red and all of this came off what I thought was actually pretty good employment data. We actually got 35,000.7 35.75 thousand ADP employment weekly change. That's a good number in my opinion. Other than that we had a couple of Fed speakers. That was really it with regard to economic data. The markets were really relying on two things. The normalization from yesterday, you know, we had a big rally yesterday and so the next day tends to be not a strong we tend to sort of digest the gains we we see or normalization. Right? But we also got some Iran news here. So earlier on Wednesday the Iranian state media reported that a draft peace memorandum stated that shipping through the Strait of Hormuz would resume and the US would remove its naval blockade. However, the US denied that report and the White House called it a complete fabrication.

[00:03:33]I have no idea why Iran would put out a statement like that. Maybe there's tensions building in the back end but a conclusive end to the US Iran war remains murky with Marco Rubio cautioning on Tuesday that any deal would likely take a few days to normalize. But Trump is not satisfied with the Iran peace deal proposal but that's how negotiations go. Trump also said he was not going to back down despite political pressure on Iran. So, he is all on the Iran train trying to get a deal right there. At the same time, Goldman Sachs raised its S&P 500 year-end price target to 8,000 from 7,600 and we've been seeing this across the board. Goldman said on Wednesday that the equity market has largely continued to perform even as the war in Iran inhibits the global energy trade.

[00:04:16]Their target would represent a 6.4% premium over the benchmark. And they said earnings growth has powered the entire S&P 500 return so far this year and we expect this dynamic will continue. The analyst also wrote noting that the conditions which have historically marked the end of high valuations and high concentration bull markets in the past remain mostly absent today. So, Goldman Sachs pretty much saying higher, okay, 8,000 target. So, we go higher from here and that's what a lot of stocks did today like AppLovin which was up 10%. I've been doing a lot of research into this name right here.

[00:04:50]And that's because Morgan Stanley came out and said the bull case is 1,100 and AppLovin can sustain above average market growth by continuing to expand its conversion rate as 99% of its ads still do not generate a conversion.

[00:05:02]There is a 10x conversion rate gap between AppLovin and market leaders which implies significant headroom to expand monetization. The market seemed to love this and pretty much at that price target in the bull case you're still getting close to a 50% discount.

[00:05:15]Why not buy the stock? I actually bought some AppLovin today, guys. I bought it at the highest sort of around here, but I'm very, very bullish on this name.

[00:05:23]Looking at Zscaler, wow, guys, down 31% absolutely brutal on what was pretty good earnings. Earnings per share came in at $1.08 versus $1.01 expectation.

[00:05:32]They beat revenue by 70 million. They beat revenue by 10%. Subscription ARR came in at 3.52 billion, but we all know that earnings don't matter, it's the guidance and there was some extreme guidance mishaps by I think the management team. Guys, let me explain, right? So, the guidance wasn't that great. They said that the demand guide for the next year was a full 3 points slower than the expected, right? So, I think it was supposed to come in at like 22%. It came in at like 18% or something like that. Um and they're going to do more CapEx, which means free cash flow revisions will be even worse, right? And then they blamed two sales people for this, non-executives, for leaving the company for the weakness. They blamed two of their sales people, two, for like a company doing close to a billion dollars per quarter, right? This excuse makes the company sound extremely fragile and I think, you know, people said, "Hey, you know, we're just going to uh people said, "We're just going to leave the stock. We don't want anything to do with it." And that's why it was down 31% despite the fact that I think Zscaler is a great product. We use it at my uh company, right? Um to sort of secure the network. There's no way we're ever leaving Zscaler. Super high retention rate uh for this name. But yeah, this was not a good look uh all things considered. Uh but then for everything we saw today here, guys, there was 3,000 uh advances, 3,100 uh decliners. We saw outflows in the Nasdaq and the New York Stock Exchange. The S&P 500 again flat here on today. Market momentum remains largely solid and we know that when market momentum is solid, especially when you look at the comparison from last week, right? You absolutely want to stay in the market.

[00:06:56]There's momentum in this market. We were looking a little bit shaky last week, but there's momentum in this market and that means there's plenty of upside left at the top of the chart. Now guys, looking at the charts right here, again, you can see a very, very mixed day um in the markets and that was coming off yesterday. So, the S&P 500 yesterday was up 0.61%. The Nasdaq 100 yesterday was up 1.76%. So, what we're seeing today is a little bit of a digestion here at the highs with the S&P 500 in the green ever so slightly, the Nasdaq in the red ever so slightly and that is the case for pretty much all of the majors right here, the equal weight, the Russell 2000, the mid-cap 400, the S&P small-cap 600, right? Um you can see international stocks were slightly down here. This is international stocks ex-US down 0.47%.

[00:07:38]Crypto taking it on the chin right here, you know, the momentum in crypto is starting to fade, but we'll see what that brings. And then looking at the macro, right, you can see volatility was down, yields were down, the dollar was flat, treasuries gained, gold was down, silver was down 2.8% very interesting.

[00:07:53]And then crude now officially below $90 a barrel, guys. Can you believe that?

[00:07:58]You know, I pretty much we were saying that we think that crude's going to probably stabilize in the mid-80 region. That's exactly where we got. Everybody was screaming sell assets right here. We took the contrarian trade. We said uh oil was going to go down. That's exactly what's happening. I think it's going to go lower. I think we're actually going to go ahead and retest these lows right here for crude oil. And then looking at some of our other sectors, the DRAM ETF and semiconductors, a bit of divergence right there, but that's because they were extremely bullish yesterday. DRAM was up 14%. When you look at the semiconductor ETF, that was up 4.48% for the most part. But let's talk about the S&P 500 and what this means for the markets right here, guys. So we're pretty much hit an all-time high. We're closing at or near an all-time high, as you can see right there. We're well above our 200-day moving average, and we're still in quite oversold territory.

[00:08:46]The same is true here for the Nasdaq 100. I did make an intraday all-time high right there in oversold territory, but you know, we're trading at these highs and well above the 200-day moving average. This does look a little bit scary. I wouldn't be surprised if we did see a little bit of a pullback, but you can see that even this major minor pullback right here, all dips just got bought into all-time highs. That's because all these major banks thinks the S&P 500 is going to go to the 8,000 level. And you know what? I kind of agree why that is the case, because earnings are looking really, really good. If we just go ahead, right, so here's the S&P 500. We take a measured move from, you know, sort of where we are right now to the 8,000 level, which is right about there. Let's go ahead and bring this down a bit. You can see that it's about 6 and 1/2%. So that's ultimately what these big banks think the S&P 500 is going to do pretty much into end of year. So that's why you say any dips that we do get will likely be very shallow if that is the upside case, right? And any dips that we do probably get are probably just extreme opportunities for you to buy because it's very likely that we're going to go and get to these highs right here.

[00:09:46]There's targets on the street that are 8,600, and the math is very, very simple. If the S&P 500 is to do seven $376 in earnings per share, all it will take is like a 22 multiple to get to like 8,600, something like that. So, absolutely crazy stuff. And a lot of these earnings is driven by some of the names like Micron, right? Micron is looking to do $100 plus in earnings per share next year. If you just say, "Okay, $100." The stock right now is $900. The stock trades on a nine times forward price-to-earnings ratio. I've seen reports out that Micron's going to do $400 in free cash flow in 2029. That's just absolutely insane. This is a trillion-dollar market cap, you know, I guess free cash flow to actual market cap is trading at like 2.5 times. Just Just insane when you look at that. It looks so cheap on these metrics, and that's why these big moves sort of kind of look justified, but you can see a Micron really [music] but definitely coming off those highs right there. So, I do like Micron. Personally, I think you should probably be looking at the DRAM ETF. You get Micron, Samsung, SK Hynix, Kioxia, SanDisk in this one ETF. I personally like this.

[00:10:52]It was flat here today. It was up significantly yesterday. It's a big weighting in Micron, 20% weighting in Micron, 20% weighting in SK Hynix. I think this is the ETF that you want to buy instead of Micron. It's just a little bit more diversified, and you get more of the chain intact. And then when it comes to semiconductors, I've been saying this all the time. I think the ultimate semiconductor you actually kind of want to own is Nvidia. Still trading largely cheap on next year's forward earnings, right? So, don't go out and buy the SMH. Probably just go ahead and buy Nvidia. And I do like Nvidia the most right here. And you're getting a really good dip buying opportunity, in my honest opinion. I think sort of this $200 range is great. Nvidia probably going to finish the year, I'd say, close to 250, maybe even $300 at the upper bull case and right there. So, that's how you play the semiconductor trade right now, which is super super hot. How do you play the software trade because some of these names look really really good. I did buy AppLovin. I bought a starter position here in AppLovin up 11.17% here today. Now guys, you can see we're actually sort of like breaking out above the 200-day moving average. At this point, you probably target some of these upper levels right here at 700 or so.

[00:11:54]The stock is incredibly cheap. Let me show you something as to why I bought the stock. So guys, if you assume consensus revenue expectations, right?

[00:12:02]Which is for about 25% growth into 2030 going from about $6 billion to about $18 billion in revenue with a 74% EBITDA conversion.

[00:12:12]The EBITDA right now is about 82% conversion. Right, so we're sort of like looking at like margins actually kind of decreasing but still extremely extremely high. I think the one bear case is that, you know, margins will contract significantly. Right now, the EV to EBITDA is 44. We're looking at multiple contraction to 25. So, if we assume this, right? So, $18 billion revenue, 74% EBITDA conversion, okay? $13 billion EBITDA, 25 multiple, looking at an enterprise value of $348 billion, right? Then you subtract the net debt to get the equity value divided by shares outstanding, which I think shares will probably decrease about 3% every single year.

[00:12:48]Management are buying back a lot of shares. You get a stock price in 2029 of $1,320.

[00:12:53]570 is the current stock price, which means you're looking at about an 18% compounded return. Even if this was to go to 20% right? You're looking at like a 12% compounded return here for AppLovin, right? Above market beating and the stock would be slightly expensive at a 15% discounted value right there. If you were to use a 12 and 1/2% discount rate, right? Again, stock looks significantly The stock looks significantly overvalued. So, this is why I bought AppLovin today. Really really like the business. Just insane.

[00:13:20]They have a super super wide moat.

[00:13:22]They're expanding their market share horizontally into other categories apart from mobile gaming. I think this company in like 10 years from now is probably going to do like $50 in revenue. I'm long the stock. But apart from at 11, I really do like Reddit as well. Reddit actually soaring here today up 6.6% and guys, this is the buy zone right here.

[00:13:39]You know, we were saying that this is a great buy zone right here for Reddit.

[00:13:42]That's exactly what the market sees right now. Maybe even front running this a little bit here, but if you think you missed Reddit, you have not. Right, this stock is going to go significantly higher and I think similar to at once it once it breaks above this 200-day moving average, it's really going to go from there. Right now, the place to accumulate Reddit is this zone right here to go ahead and accumulate Reddit.

[00:14:03]I also do like ServiceNow. They were up about 3% here today and again, you know, trading at these lows and these are strong, strong companies with absolutely wide moats and I think we'll do very, very well in the very long term. But you also do want some exposure to the hardware trade through the DRAM ETF as well as Nvidia. Now guys, let's talk about crypto. I'm not going to say much right here. You pull back from the the 200-day moving average in Bitcoin.

[00:14:27]Hopefully we find support and go up from there. Ultimately, the most bullish thing we can do is probably find support right here and then probably go from there onward and upward with the 200-day moving average sort of moving like that.

[00:14:39]That would be absolutely insane.

[00:14:41]Ethereum, I'll wait for it to get closer to the 200-day moving average right there. International stocks, they are breaking out. That's really, really good. I think they're going to go higher. They're also pretty cheap on almost every metric, but the revenue growth isn't quite there similar to what we're seeing in the US. If you want revenue growth, you're definitely looking at US stocks right now. But there are a couple of US companies that are doing really, really well. For example, Sea Ltd. This thing is like just absolutely ballooned in the last couple of weeks and this is a European company, but I wouldn't be surprised to see this come down significantly over the next couple of months because this is absolutely crazy for you know, 26 a 26x in since March just absolutely, absolutely insane. Now, all in all, you guys know I'm bullish stocks. Any pullbacks we do get, uh buy the dip because I do think we're going to see 8,000 in the S&P 500 sooner rather than later. Now guys, let's talk about sentiment. And despite the wobbles, despite all of the news, despite Iran, despite everything, we continue to remain in greed, not extreme greed, despite trading at all-time highs. And again, this is just fuel for the upside. And I think the upside right now is simply earnings. Stocks are making so much money. Companies are making so much money. S&P 500 earnings are $390 a share. I think I quoted 370, close to $400 in earnings per share here for 2027 estimates, right? If you slap a 22 multiple on that, right, you're looking at S&P 500 8,560.

[00:16:03]If you slap a 20 multiple on that, you're looking at close to 8,000, right, for the S&P 500. And this is where the multiple is right now. So, if earnings continue to grow this year, multiple doesn't expand, you're looking at 8,000 plus in the S&P 500. And I think that's why we're seeing revisions to the upside as it pertains to S&P 500 price targets.

[00:16:21]And I think that's going to boost the the market and continue with rallying to the upside. When we look at the macro, things are looking good. 4% GDP plus for Q2. The odds of a recession are down at its lowest level in the year. But we do have to be aware of the risks. There's some very, very strong data that could impact the market coming out tomorrow.

[00:16:39]Core PCE, durable goods, GDP, and then personal income outlays. So, we got to pay attention to the economic data here tomorrow. In terms of earnings, right, we have Best Buy, Dell, UiPath, and Costco, Order Desk, SentinelOne, and Okta. They're all reporting after the close, particularly Okta and SentinelOne, right? These are um cybersecurity names. Okta with Zscaler did, we'll see what happens for the most part. But again, still a big, big day tomorrow, guys. But if you've made it up until here, thank you so much for watching. If you like this video, please subscribe, hit the notification bell, as well as the like button, and leave a comment for the algorithm. Cheers.